Consumers are still buying everything at a healthy pace, but the declining value of the dollar is worrisome because if foretells higher prices for imports.
If spending slows down, so will the entire economy, forcing the Federal Reserve to choose between cutting interest rates to fight recession and raising them to fight inflation. It's a situation reminiscent of the stagflation of the Carter years.
Part of the trouble is caused by this country's refusal to use less foreign oil, now at record highs. Gold, too, has gone up in value as investors seek a safe financial haven in uncertain times.
Many trends, such as China's growing thirst for oil, are beyond U.S. control. What Americans can do is cut down on waste, such as commuting long distances every day in inefficient vehicles.
Current energy policy does nothing significant to promote conservation. While some industrialized nations have cut their oil consumption, including Japan, Germany, the United Kingdom and Brazil, oil usage in this country continues a steady upward climb.
The lower the dollar falls in international value, the more dollars we must send out of the country for each barrel of oil.
Until Americans join most of the rest of the world in seriously trying to conserve, we can't expect a dollar to go as far as it used to.
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